How does a narcissistic leader affect an organization? In Decoding the WorkplaceI differentiated healthy narcissistic leaders from unhealthy ones, stating “healthy narcissistic leaders understand their strengths and know when to seek the advice of others” (pp. 105-106). In a 2014 blog I shared findings from a literature review of narcissists.

In a 2018 The Leadership Quarterly article, Charles O’Reilly III (Stanford), Bernadette Doerr (UC,Berkeley), and Jennifer Chatman (UC,Berkeley) concluded “although some researchers have suggested that narcissistic CEOs may have a positive influence on organizational performance . . . a growing body of evidence suggests that organizations led by narcissistic CEOs experience considerable downsides.” Their research focused on “grandiose narcissism” in which the narcissist is highly assertive, extroverted, with high self-esteem. Characteristics include:

Inflated sense of entitlement

Unrealistic sense of personal superiority

Viewing others as inferior

Overconfidence

“Willingness to manipulate others”

“Hostility and aggression when challenged”

In reviewing studies of narcissistic leaders, they found narcissistic leaders:

“More likely to emerge as leaders”

“Charming,” good first impressions

More persistent at focusing on task at hand

“More willing to take chances”

“Overly confident about own judgment”

“Discount negative feedback”

“See others as less competent”

Pursue activities and strategies that are self-enhancing.

“Believe themselves less vulnerable to being penalized for their overconfidence”

“Lower in integrity”

“More likely to engage in unethical behavior”

More likely “to engage in sexual harassment”

More likely to bully others

Inhibit the exchange of information among group members

Studies indicate narcissistic CEOs more likely to:

“Manipulate corporate earnings”

“Aggressively avoid paying taxes”

Produce financial reports “with lower accounting quality”

“Misreport financial status”

To “be at risk of committing fraud”

O’Reilly and his colleagues reported two experimental studies and a field study of 32 technology companies. Their field study found companies with more narcissistic CEOs had “more lawsuits filed against them and the lawsuits” endured “for longer periods of time.” Companies “with more narcissistic CEOs are more likely to be sued and this litigation will take longer to be resolved.”

My take-aways:

1. Hiring: It may be difficult to identify unhealthy narcissists when hiring. References may or may not be forthcoming with accurate assessments. In interviewing notice how much credit the potential hire gives to others when discussing accomplishments. There is advice online about how to tell when hiring if someone is a narcissist but I would need to see the research before recommending.

2. Promoting: Interestingly highly narcissistic leaders get promoted. They charm, take credit for accomplishments, and so forth. Where input can be obtained from subordinates, such as in a 360-degree assessment, the organization should obtain more information and perhaps a more accurate picture.

3. Managing: Those who supervise a highly narcissistic individual who is damaging the morale or financial health of the organization should do their jobs. Be accountable and hold that individual accountable. Corporate boards should do likewise.